The short is an allegory for the child molestation accusations leveled against Jackson, and the resultant scandal, over 1993-94. The mysterious "Maestro" (Jackson) has secretly been telling ghost stories and performing magic tricks for the young boys of nearby Normal Valley, but when one of the boys tells the adults of the town about it, they form a Torches and Pitchforks mob led by their Mayor (Jackson again) to run the "freaky" stranger out of town. Maestro responds by trapping them in his Haunted House with him and unleashing a parade of ghouls and dance numbers...

This film contains examples of:

The Mayor and the other adults = Adults who find his Real Life behavior suspect; commonly interpreted as a direct Take That in the Mayor's case. As the Wikipedia article puts it, he is "a comically arrogant, plump [and white] man who bears more than a passing resemblance to Thomas Sneddon", the Santa Barbara district attorney who tried to prosecute Jackson on child molestation charges in 1993-94, and actually would over 2003-05 when another accuser came forward with similar claims.

The angry mob assembling when one of the boys makes the mistake of revealing the secret meet-ups with Maestro = Jackson being accused of molestation by Jordan Chandler. Note that the boy in the film is chewed out by his older brother for spilling the beans, but their mother insists "He did the right thing."

Badass Baritone: Michael Jackson uses his actual, deep-register voice when playing as the mayor, making Ghosts the only known recording that showcases him using that voice at length.

Body Horror: First, the Mayor is subjected to an Orifice Invasion, then is forced to perform against his will, and then is transformed into a hideous "ghoul" version of himself.

Book Ends: Maestro is introduced by pulling a prank on the town residents. At the end of the film, a group of kids pull a similar trick on the Maestro.

Broken Aesop: According to Word of God, this is a story of how True Beauty Is on the Inside, and how just because a person is "different" from others doesn't make them bad. Unfortunately, the two characters Jackson plays both break the Aesop. The bigoted Mayor — a fat, middle-aged white guy — is presented as an Acceptable Target throughout, with no redeeming qualities. The ostensibly good Maestro — i.e. Jackson himself — magically imprisons the angry mob confronting them and tortures the helpless Mayor, proving he really was the dangerous "freaky boy" the Mayor accused him of being! And even if you ignore the Mayor and the mob of paranoid parents, the Maestro is still a necromancer who regularly summons a bunch of undead to do his bidding. That's a legitimate concern for an otherwise normal suburban neighborhood!

The Cameo: Mos Def is part of the angry mob that wants to run Maestro out of town.

Dem Bones: Maestro pulls off his own skin and strips to being a skeleton, whereupon he dances.

Disney Death: Maestro fakes his death to throw off the Mayor in the climax.

Disney Villain Death: Seeing that the Maestro isn't dead and has reassumed his Superghoul form to boot sends the Mayor fleeing through a window. A transcript of the film (which, sadly, has since evaporated along with Geocities) even calls this a "presumably very messy Disney Villain Death". No one seems to care either way in-story.

Dope Slap: In the early going, a running bit has a little boy's older brother smack him this way for revealing stuff about the mysterious Maestro that he was supposed to keep secret. Their mother then does the same to the older brother, usually with the comment "Don't hit your brother!" After the third go-round of this, the mother is smacked by an unseen force, implied to be the Maestro's doing.

Literally Shattered Lives: Maestro smashes himself into the floor as if he were made of stone when the Mayor says he still wants him to go, crumbling into dust. This turns out to be a Disney Death trick, however.

Moonwalk Dance: Michael transforms himself into a skeleton and dances the moonwalk.

Nightmare Face: Maestro pulls his face in grotesque appearances and transforms into a skeleton.

Orifice Invasion: The Maestro possesses the Mayor by turning into a liquid form and pouring himself down the victim's throat.

Protagonist-Centered Morality: Though leading an angry mob is an overreaction, it's not hard to sympathize with the Mayor for being concerned that a strange person who otherwise doesn't interact with anybody in town is not only meeting with kids but telling them to keep their meetings a secret, and to see Maestro's behavior as unnecessarily cruel. That the deck is clearly stacked in Maestro's favor — the Mayor is just a lot of talk, with no evidence that he could back it up with action (given how reluctant the mob is) — doesn't help.

Ravens and Crows: A crow watches the approaching mob and later startles them in the ballroom before turning out to be a shapeshifted form of Maestro.

Stockholm Syndrome: When Maestro reveals that he actually has magical powers, he proceeds to terrify the crowd with them; when they try to flee, he traps them and declares they're his guests. He summons the ghouls to assist him, and what follows alternates between entertaining the crowd and terrifying it. When all is said and done, the Mayor is the only person who still wants Maestro gone from the town. Of course, this trope is unintentional on the filmmakers' part, as the viewer is supposed to see the Maestro as the one in the right all along.

The dialogue in "Ghosts" is elemental to a perverse degree: No one ever obfuscates when they can communicate what they're feeling in the bluntest, most primitive manner possible. So we learn that The Mayor thinks Maestro is weird and strange and doesn't like him when The Mayor says, "You're weird. You're strange. [And] I don't like you."

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